Update: Official Blizzard Statement
Update 2: From Method: http://www.methodwow.com/board/conte...R-exploit-bans Paragon weren't the only ones, according to this some got perma bans as well.
Players that exploited LFR to get loot multiple times supposedly are receiving 3-8 day bans tonight.
There has been a lot of misinformation going around, so to clear things up, here is a truthful account of what exactly happened with the LFR and what we have to say about it:
The patch hit EU servers on Wednesday. We started off with our 5x Firelands runs to wrap up legendaries and called it a night. For Thursday, we had an elaborate plan to run a personal LFR raid for every main character to get the maximum amount of loot.
As we were doing the first few runs, we noticed an unrealistic amount of tier pieces on some guilds' armory profiles, which we thought was unattainable through normal means. We started looking into it, and found out that you can loot passed gear from bosses, regardless of save status, if you zone out and back into the instance. This did not provide the raid with any extra loot, but it did eliminate a major portion of the RNG that would have been involved in simply doing personal runs for everyone.
We acknowledge that using this unintended behavior, which was quite clearly a bug, to our gain, was wrong. The fact that others were using it as well is no justification for doing it ourselves. We apologize for doing it, and accept whatever consequences follow.